THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

[17:00:14] WOLF BLITZER, CNN ANCHOR: Happening now:

Market meltdown. The Dow Industrials lose 611 points and they aren't alone. Stock exchanges around the world are posting heavy losses all because of a shocking, unexpected election result.

Leaving you. That's what the British are telling the continent, as voters decide to pull out of the European Union. The pound is collapsing. The British prime minister is resigning. We're following all the angles of the political and financial crisis.

Off course. At his golf resort in Scotland, Donald Trump tries to look presidential, but gives the Clinton campaign new ammunition to use against him.

And Un-der fire. The swaggering Kim Jong-un says North Korean missiles can now hit Americans far from his country's shores. How real is the threat?

I'm Wolf Blitzer. You're in THE SITUATION ROOM.

(MUSIC)

ANNOUNCER: This is CNN breaking news.

BLITZER: We're covering the breaking news: financial upheaval and political uncertainty here in the United States and around the globe as a result of the British's vote to leave the European Union. Financial markets around the globe are tumbling. The Dow Industrials lost 611 points, more than 3 percent of their value.

There's another important fallout: the British Prime Minister David Cameron is resigning. He led the fight to keep closer ties with Europe. Now there are fears of a domino effect. Will other nations leave as well?

Donald Trump who just happens to be visiting a golf resort in Scotland calls the British vote a great thing. He tells reporters he sees a big parallel with his own call to limit immigration, saying the British, quote, "want to take their borders back."

We're also following an ominous, new round of bragging and threats from North Korea's Kim Jong-un. He says his latest and only partially successful missiles test says his country has the sure capability to attack Americans. The U.S. State Department spokesman John Kirby, he's here in THE SITUATION ROOM. He'll take our questions.

And our correspondents, analysts and guests, they will have full coverage of the breaking news, what it means for you.

Let's begin in London where our CNN international diplomatic editor Nic Robertson is following reaction to the British vote.

Nic, this result really shocked a lot of people. What's the latest?

NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR: Yes, Wolf, particularly here in London, where so many people voted to remain in the European Union, there's been shock, there's been dismay. Indeed in the last hour, I saw a young lady walking along the street holding a poster in front of her with a picture of a sad face on it.

People here, a lot of young people in upset and unhappy. Not like those in the leave campaign though who are celebrating.

(BEGIN VIDEOTAPE)

ROBERTSON (voice-over): A vote to leave the European Union sending shock waves around the globe tonight. Markets tumble and investors' nerves were rattled. The British pound falling to a 30-year low.

It was an unexpected defeat for British Prime Minister David Cameron who fought hard to keep Britain in the E.U.

DAVID CAMERON, BRITISH PRIME MINISTER: The British people have voted to leave the European Union and their will must be respected.

ROBERTSON: Cameron, his voice wavering announced he would step down as prime minister.

In Scotland, where they voted overwhelmingly to stay in the E.U. vowed today that they would push a new referendum to break away from the U.K.

Nigel Farage, a leader of the leave campaign, declaring victory. His message resonated with British voters who fear a flow of immigrants into the country and worries over securing borders.

NIGEL FARAGE, "LEAVE" CAMPAIGNER: Ladies and gentlemen, dare to dream the dawn is breaking on an independent United Kingdom.

(CHEERS)

ROBERTSON: More than 70 percent of the electorate turned out to make their voices. The vote revealed a shock, generational divide. According to a British poll, 64, of young people, ages 25 to 29, wanted to remain in the E.U., while 61 percent of voters, 65 and older, voted to leave.

Former London Mayor Boris Johnson, now a leading contender to replace Cameron. BORIS JOHNSON, FORMER LONDON MAYOR: There's simply no need in the

21st century to be part of a federal system of government based in Brussels that is imitated nowhere else on earth. It was a noble idea for its time. It is no longer right for this country.

[17:05:021] ROBERTSON: President Obama says the U.S. respects the British decision to leave even though he urged British voters to remain in the European Union.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Yesterday's vote speaks to the ongoing changes and challenges that are raised by globalization. But while the U.K.'s relationship with the E.U. will change, one thing that will not change is the special relationship that exists between our two nations.

(END VIDEOTAPE)

ROBERTSON: President Obama called David Cameron. David Cameron promised him that there would be a steady transfer of power, tried to offset all the financial repercussions that are flowing around the globe right now, Wolf.

BLITZER: Nic Robertson in London for us -- Nic, thanks very much.

Let's look at what is the most immediate effect of the British vote. Today's steep drop in stock values which millions of people will see reflected in their retirement savings.

Our business correspondent Richard Quest is standing by.

Richard, what could this decision mean specifically for U.S. investors who may be watching us right now when it comes to the global stock market?

RICHARD QUEST, CNN BUSINESS CORRESPONDENT: Well, I think what you're talking about is turbulence, uncertainty, worry, because we don't know how this is going to play out, Wolf, over the next several years. Obviously, some sort of an arrangement will be put together between the United Kingdom and European Union. But that is not going to happen overnight, far from it. It could take up to two, three, four years.

All of the big companies, particularly the U.S. multinationals -- for example, Ford has already put out an announcement saying the U.K. company continues as normal. But we're seeing -- we're going to see extreme nervousness and unease, simply because no one really knows what the future is going to look like. And in those sort of environments, investors sell or they stay on the sidelines and, Wolf, already the global economy is extremely fragile.

BLITZER: Indeed it is. And although a stronger dollar is good for U.S. travelers, what could it mean for U.S. trade and for U.S. businesses?

QUEST: Ooh, a strong dollar makes exports much, much worse. And that's one of the black spots in the U.S. economy at the moment. As the dollar gets stronger so companies like GE, like Boeing, all the major manufacturers, they start to worry because there's very little you can do about it. Yes, you can hedge but ultimately you then have to push down on your own production costs. And, Wolf, when the euro is weak because of Brexit, when the pound is weak because of Brexit, when the Japanese yen certainly become stronger, when you got these forces in the global economy that are now competing against each other, that is why you're seeing the dollar strengthen and for the U.S. industry, it makes it much more difficult.

BLITZER: And if U.S. markets don't recover, how could this impact U.S. interest rates?

QUEST: They are going to recover, wolf, because there is no logical reason why there should be long-term implications for the vast, giant U.S. economy because of Brexit. There will be indigestion, if you'd like, over the next few months. But there's certainly going to be no long-term effect for the U.S. economy.

It may cause the Fed to pause a little bit longer. Janet Yellen has already said that. Obviously, Brexit and the turmoil is one of those reasons not to raise interest rates anytime soon. But longer term, you know, much as those of us in Britain would like to think that the rest of the world is terrified or worried about everything that we do, the reality is U.S. will continue majestically without.

BLITZER: You call this, Richard, the most important vote of your life. How surprising was the result?

QUEST: By the time we got to it, I pretty much had guessed Brexit was going to be the answer because I've traveled around the country last week, I've heard the views. I've wondered whether the murder of Jo Cox was going to influence it.

We started the night, Wolf, and it looks as though remain had won, but soon as we got Sunderland and Newcastle, Basildon, the very early results, it was clear that the leave was leading by more than expected and remain was winning by less than expected. Brexit was inevitable by 4:00 in the morning.

BLITZER: Richard Quest reporting for us from London -- Richard, thanks very much.

Joining us right now in THE SITUATION ROOM, the U.S. State Department's spokesperson John Kirby.

From the president on down, it was no secret, the U.S. wanted the U.K. to remain in the E.U. It's a huge disappointment, a huge setback for the U.S.

[17:10:02] What's your biggest fear right now?

JOHN KIRBY, STATE DEPARTMENT SPOKESMAN: Well, let me tell you, certainly, the outcome wasn't what our government's preferred, but it is, of course, the will of the British people and we respect that.

And so, it's not about fear going forward, Wolf. It's about making sure that we're staying in touch with leaders in the U.K., leaders in the E.U. and working to make this transition as --

BLITZER: Were you stunned, as so many other people were, by the result?

KIRBY: You know, I don't think anybody had a sense last night which way this was going to go. We knew that it was going to be close, of course, and we were watching it obviously like everybody else. But, I mean, again, this is the will of the British people and we're going to respect that.

BLITZER: When the president was in the U.K. in April. He spoke with David Cameron. He made it clear he doesn't want the U.K. to leave the E.U. And he also had some British subjects over there thought was a direct warning to the British people if they voted to leave the E.U. Listen to what he said.

(BEGIN VIDEO CLIP)

OBAMA: I think it's fair to say that maybe at some point down the line, there might be a U.K./U.S. trade agreement but it's not going to happen any time soon because our focus is in negotiating with a big bloc of the European Union to get a trade agreement done and U.K. is going to be in the back of the queue.

(END VIDEO CLIP)

BLITZER: It generated, as you well know, a lot of commotion in the U.K. because they saw that, as he was, A, interfering in domestic British politics, but B, he was warning them, you better not leave the E.U. Otherwise, forget about future U.K./U.S. trade deals.

KIRBY: We think the president's concerns are still valid even today.

BLITZER: So, they are still at the back of the line?

KIRBY: The concerns that he expressed are still valid.

BLITZER: But you'll still negotiate with the E.U. deals before you do separate deals with the new U.K. outside of the E.U.?

KIRBY: What we're going to do, Wolf, going forward is work closely with U.K. officials and E.U. officials, as they work out what this means and that's really important here. There is a long process. Richard talked about that just a little bit ago. It could take two years or even more.

And so, we're going to stay close engagement on this as they move forward and we will review and consider our options, too, on the trade front as we move forward.

BLITZER: But explain why you can't negotiate new trade deals with the E.U. and, at the same time, with a separate U.K., with Britain you negotiate separate trade deals as well. Why can't you do the same simultaneously? Why do you have to push the British to the back to the line? KIRBY: Well, again, the president was expressing a concern about our desire to have a strong U.K. voice and a strong E.U. Now the British people have decided that they are going to leave the E.U. That's their right and we respect that.

So, what we're going to do going forward is review our options on all matters, all sectors, not just the economic sector. As the E.U. and U.K. negotiate their way through this and it's going to take some time.

So, we're going to very closely watch the progress of the process. We're going to stay in touch with all sides and we'll make decisions down the line. It's just too soon to speculate exactly what it's going to mean in terms of preferences one way or the other.

BLITZER: You heard Donald Trump sees parallels to what happened in Britain and what's happening now in the United States, as far as immigration for example is concern over a sort of open-ended immigration. Is he right?

KIRBY: Well, look, there's no question that migration concerns, the refugee crisis in Europe is obviously front and center in their minds, not just U.K. but all across Europe. We understand that. And we understand that there's a concern about that here in the United States, too. The secretary has spoken to that.

But that's one of the reasons, Wolf, that we're working so hard to bring the civil conflict in Syria to a close. It's one of the reasons why we're going against Daesh in Iraq and Syria. We understand that many people are fleeing. We want to be able to provide a home for them to go back to. That's the real concern and that's what we are focused on at the State Department.

BLITZER: Until now, there were 28 members of the European Union. With Britain gone, there's 27. We're going to talk about the possibility of a domino effect other countries leaving the E.U., what that could mean for the United States.

John Kirby is with us. We'll continue our conversation right after this.

(COMMERCIAL BREAK)

[17:18:26] BLITZER: We're back with U.S. State Department spokesman John Kirby as we continue to follow the breaking news, financial upheaval and political uncertainty across the globe as a result of the British to leave the European Union.

ELISE LABOTT, CNN GLOBAL AFFAIRS CORRESPONDENT: Well, Wolf, tonight, E.U. leaders are scrambling to calm fears of an E.U. collapse and right wing parties are riding the Brexit wave, as the continent now faces a contagion of votes to leave the E.U.

European leaders awoke to the harsh reality of Britain's popular revolt. The vote, a devastating blow for the European bloc, already reeling from economic strain and the greatest migrant crisis in its history. As global markets tanked, German Chancellor Angela Merkel tried to reassure a nervous European public that the union was not at risk of collapsing.

ANGELA MERKEL, GERMAN CHANCELLOR (through translator): We cannot jump to quick conclusions because this would have a further rift within the European Union.

LABOTT: But the dam may already have been broken and many fear a domino effect, with growing calls across Europe for referendums to leave the E.U.

Populist right-wing parties were already gaining ground in the polls, lost no time hailing the British vote as a victory for their anti- E.U., anti-immigration message. Dutch politician Geert Wilders tweeted, quote, "The Netherlands will be next".

And far right leader of the French nationalist front party, Marine Le Pen, tweeted, "Victory for freedom", calling for France to have its own vote.

[17:20:07] French President Francois Hollande called the vote a wake- up call for Europe.

FRANCOIS HOLLANDE, FRENCH PRESIDENT (through translator): Faced with extremism and populism, we need less time to undo than to create, to destroy than to build, France, a founding country of Europe, will not accept this.

LABOTT: In Dublin today, Vice President Biden spoke about some of the fears that left the leaders to leave the E.U. with a thinly veiled reference and a warning about Donald Trump.

JOE BIDEN, VICE PRESIDENT OF THE UNITED STATES: Mass migration, war, terrorism, infectious disease, climate change, economic unease and anxiety, and the inevitable human reaction of frustration and anger. All this provides fertile terrain for reactionary politicians and demagogues peddling xenophobia, nationalism and isolationism.

LABOTT: But next door in Scotland, Trump found a parallel between the British vote and the anti-establishment message that fueled his rise.

DONALD TRUMP (R), PRESUMPTIVE PRESIDENTIAL NOMINEE: They want to take their borders back. They want to take their monetary back. They want to take a lot of things back. They want to be able to have a country again. So I think you're going to have this happen more and more. I really believe that and I think it's happening in the United States.

(END VIDEOTAPE)

LABOTT: Now, France and Germany have their own elections next year, and Italy the year after. And with the rise of these populist anti- E.U. parties will fears tonight, Wolf, that the cracks in Europe will only continue to deepen.

BLITZER: Elise Labott at the State Department, thank you.

We're back with State Department spokesperson John Kirby.

Are you afraid of this domino effect that other European countries will decide to leave the European Union?

KIRBY: Well, as I said, Wolf, this isn't about fear. This isn't about working through what's going to be a lengthy process. Obviously, just as we said with the British people, the people of sovereign nations have to make decisions for themselves and we respect that.

That said, as we said before the referendum, we believe in a strong E.U., and the E.U. remains an indispensable partner for the United States on social and economic and, of course, military and security matters. We look forward to continuing that close partnership as they work with the U.K. on this particular exit, but also as we work with the E.U. going forward on so many issues.

The E.U. was front and center in the Iran deal. The E.U. was front and center and remains front and center in the International Syria Support Group. There's a lot of work to be done and we're looking forward to keeping that way.

BLITZER: What happens if other countries followed Britain's lead right now? What will happen to the U.S. security? And is there fear that it could expand to NATO, that some NATO allies may want to leave as well?

KIRBY: Well, I think the NATO alliance is more relevant, more vital, more vibrant than ever. I don't think there's any concern about the NATO alliance, and I would remind you that the British military is well above that alliance and we'll continue to do that and we look forward to that.

I don't want to hypothesize or speculate about what individual nations may or may not do. Again, we believe in a strong E.U., we believe in the partnership, that the strength of that partnership and we're going to look forward to --

BLITZER: No secret, the Russians are pretty happy about this. They see a weakened Europe right now which automatically from their perspective mean as stronger Russia.

KIRBY: I don't see a weaker Europe here. I don't know how anybody could look at this and say that's what we're facing here. The British people made a decision, but the E.U. still remains vital and --

BLITZER: Without the U.K., though.

KIRBY: Well, yes, of course. But that doesn't mean that the relationship with the U.K. is going to change, as the president said. It's going to remain strong as well. It's a special relationship and, again, Wolf, it's important for people to remember, this is a lengthy process. This is going to take some time.

It's not -- this vote is a few hours old. There's a lot we don't know, a lot of work that has to be done to sort out. But whenever we ended up going with it, we're confident that our relationship with the U.K. is going to remain strong and the partnership that we have with the E.U. is also going to remain just as vital.

BLITZER: All right. John Kirby, the State Department spokesman, thanks for coming in.

KIRBY: My pleasure. Thank you.

BLITZER: Coming up, the political fallout of the U.S. presidential campaign. Donald Trump says British voters want to, quote, "want to take their borders back." Is that a sign of what's coming here in the United States?

And later, a new threat from North Korea's Kim Jong-un. He says his latest missiles have, and I'm quoting now, "a sure capability to attack Americans."

(COMMERCIAL BREAK)

BLITZER: The breaking news as global leaders absorb the shock of the United Kingdom's sudden divorce from the European Union. Donald Trump is praising the U.K., calling the vote a victory for border control and promising a similar outcome here in the United States.

Our political reporter Sara Murray is following the Trump campaign in Scotland right now.

Sara, what's the latest?

SARA MURRAY, CNN POLITICS REPORTER: Well, Wolf, today, it wasn't your typical presidential campaign foreign trip. Donald Trump was here christening a golf course. They think this is the ninth Trump property we visited while covering his campaign but to use the opportunity while here in Scotland to applaud the U.K. for deciding to leave the European Union and said he hopes America is paying attention.

(BEGIN VIDEOTAPE)

MURRAY: With Scotland's lush hills at its back, Donald Trump is applauding the U.K.'s decision to turn its back on the European Union.

TRUMP: People want to take their country back and they want to have independence.

MURRAY: Trump sensing parallels today between the voter angst, driving the British exit and the anxieties fueling his campaign in the U.S.

TRUMP: You're going to have more than just, in my opinion, more than just [17:30:00] what happened last night, you're going to have I think many

other cases where they want to take their borders back. I think it's happening in the United States.

SARA MURRAY, CNN POLITICS CORRESPONDENT: Trump even claiming President Obama bears some responsibility for the Brexit after he pushed for the opposite outcome.

TRUMP: I actually think that his recommendation perhaps caused it to fail.

MURRAY: As he argued both Obama and Hilary Clinton are out of touch with American voters.

TRUMP: She's always misread everything. The only reason she did it is because Obama wanted it, you know. If Obama wanted the other way, if he said leave, she would have said leave.

MURRAY: Clinton's campaign fired back.

JAKE SULLIVAN, CLINTON FOREIGN POLICY ADVISER: He's not concerned with foreign policy, he's not concerned with the American people or their retirement accounts or their security. He is concerned with himself and that's it.

MURRAY: Trump, who just days ago admitted he didn't spend much time brushing up on the Brexit, felt little need to do so with his foreign policy advisers today.

TRUMP: I've been in touch with them, but there's nothing to talk about.

MURRAY: And from the ninth hole of his Trump Turnbury golf course --

TRUMP: A lot of people think this will be the greatest par three anywhere in the world.

MURRAY: The presumptive GOP nominee stood by his decision to simultaneously run for president as he run the company.

TRUMP: Well, I don't think it matters while I'm running.

MURRAY: Even suggesting the Brexit could benefit his business.

TRUMP: If the pound goes down, they're going to do more business. You know, when the pound goes down more people are coming to Turnberry, frankly.

MURRAY: All of this while dismissing his rocky relations with foreign leaders like David Cameron who announced his resignation today.

TRUMP: Where is David Cameron right now?

MURRAY: But in a sign that not everyone is eager to welcome Trump to Scotland, a comedian interrupted Trump's event, scattering golf balls emblazoned with swastika. LEE NELSON, BRITISH COMEDIAN: These are the new balls available from

the club house as part of the new Trump Turnberry range and I forgot to hand them out before. I'm very sorry, Mr. Trump.

(END VIDEOTAPE)

MURRAY: Now Donald Trump continues his trek through Scotland tomorrow and throughout this entire trip, he doesn't have any publicly scheduled meetings with diplomats or with any foreign leaders despite the context that's unraveling here around it. But he will be making yet another stop tomorrow at yet another Trump property -- Wolf.

Gloria, Trump says he sees parallels between what just happened in the UK and what's happening here in the United States involving his campaign. Do you see those parallels?

GLORIA BORGER, CNN CHIEF POLITICAL ANALYST: I think he may be right, to a degree, if you look at the voting in Brexit. You see older, less well-educated white voters who have a strong sense of nationalism, who feel that immigration has affected their pocketbook, who see their economic prospects dimmed, who are against trade deals and disaffected from the establishment. And I think you see that -- you know, you see that in the United States as well.

I mean, what Trump is saying, however, is that Brexit won so I'm going to win. I wouldn't -- I wouldn't cross that bridge. But there are parallels absolutely.

BLITZER: Some parallels indeed. And Peter, what do you think? Was there a similar populist agenda here in the UK and here in the United States that could impact the general election in November?

PETER BEINART, CNN POLITICAL COMMENTATOR: Yes. There's certainly similarities that Gloria pointed out but I think the big difference is that Brexit was an idea, Trump is a person. So, you know, it would be the kind of the equivalent of us having a referendum on leaving NAFTA or leaving the WTO.

The problem that -- even the people who may sympathize with some of Trump's ideas about immigration or trade, many of them have very, very serious doubts about him as a person and, frankly, I think his -- you know, his buffoonery was exemplified just when he said today, he said that there was nothing for him to talk about with his foreign policy advisers about Brexit? Is he out of his mind?

I mean, this is a massive -- this is a geopolitical earthquake, has big implications for our relationship with Russia, how we're going to do -- you know, how we're going to deal with Syria. I mean, the idea that he doesn't think there's anything for him to talk about with his policy advisers, about Britain doing the most significant thing since World War II in terms of foreign relations, again, it's remarkable.

BLITZER: You know, there's no doubt the Dow Jones went down, Mark, today more than 600 points. Global markets suffered, the British pound at its lowest right now, what, in 30 years. If the negative trends continue and there's real economic fallout, negative economic fallout, could that hurt Trump going into the election? Because he praised this. He said this is a good idea.

MARK PRESTON, CNN POLITICS EXECUTIVE DIRECTOR: He certainly has linked himself to it. Look, Brexit is something that is not going to take hold immediately. But the fact is when you're looking at the leading indicators, the leading indicators being the markets immediately reacting negatively to it, that is not a good sign. The UK is the fifth largest economy now in the world. You are talking about the UK being the second largest donor to NATO.

[17:35:04] Now if UK decides to pull money out of NATO, talking about the destabilization of a force that is really keeping a stabilizing factor in an area that is very much on thin ice, right, and not a very stable place. So economically not necessarily a good thing for Trump if things get worse but also for the safety of the U.S. and, quite frankly, Europe as well.

(CROSSTALK)

BORGER: But it could hurt Clinton. If the economy, you know --

PRESTON: If it goes the other way then Trump could look like -- could look brilliant, but the fact is, I still think it's going to.

BORGER: No, but even if the -- if it affects the economy here negatively, Trump can blame it on other things and say, you know, this is Obama's economic policies and it could hurt Hillary Clinton as well. I mean, you have to think of it that way, too.

BEINART: Right.

BLITZER: Go ahead, Peter. You want to weigh in.

BEINART: Well, no, Hillary Clinton is the de facto incumbent in this race.

BORGER: Right.

BEINART: She's running on Barack Obama's legacy. So his popularity, which would be affected if the economy turned south, yes, I think that would be a real concern for her and I think that's one of the things you have to imagine the Clinton people are very concerned about now right now.

BLITZER: All right. Everybody, stand by. There's more to assess. This is a really huge development in world history that we're watching right now. Stay with us. We'll be right back.

(COMMERCIAL BREAK)

[17:40:51] BLITZER: We're following the breaking news. The United Kingdom has voted to leave the European Union. It's a decision that will have an enormous impact on global markets, international politics, and the U.S. presidential race as well.

Let's get back to our political experts. You know, Gloria, at his news conference in Scotland today, he spent a lot time, most of the time, in his opening, what, 13-minute statement talking about his new golf course -- his golf resort over there as opposing -- as opposed to talking about Brexit. How does that play politically?

BORGER: Well, and one other thing he did, Wolf, when he talked about the politics of it, he talked about President Obama and you know, there used to be this old rule that politics stops at the water's edge. When you're on foreign soil, you don't criticize the president of the United States. Well, OK. That's over with. Let's set that aside.

I think the large impression that comes away from this is the fact that, A, he said he hadn't been briefed by his foreign policy advisers on this, and that when it came to the question of foreign markets, et cetera, he was talking about how it would affect Turnberry. Not how it would affect the United States.

BLITZER: Turnberry is his golf course.

BORGER: His golf course. Not how it would -- how it would affect our currency, making the dollar stronger, people might be less willing to trade with us. But he talked about his business and so that raises questions. If you want to be president of the United States, which comes first? Right?

BLITZER: Yes. Should he at least meet with some foreign leaders if he's going to make a trip during the course of a political campaign like this? Because other U.S. presumptive nominees and nominees, they go overseas on trips but they usually at least meet with some foreign leaders on those trips.

PRESTON: Well, far be it from me to give Donald Trump any kind of advice about how to run a political campaign because, you know, he talks about running this new campaign but the fact of the matter is, you're absolutely right. When you make the trip over to Europe or to the Middle East, you go for the purpose of being able to sit at the same table with world leaders and to show voters back here that you are able to get these meetings, to have these discussions and to deal with big problems.

Listen, he is over there right now. If he can't meet with anybody in the UK because they're a little bit busy right now, he could hop right down to Israel or where have you, and line up those meetings. I'm surprised he's coming back so quickly.

BLITZER: Yes. I remember when Romney four years ago, he went to Israel, was in Jerusalem and met with the Prime Minister Netanyahu --

(CROSSTALK)

PRESTON: Right.

BLITZER: They all made trips and all of us remember when then Senator Barack Obama eight years ago went --

BORGER: Went to the Middle East.

BLITZER: Germany, you remember that trip.

PRESTON: Right.

BLITZER: He had, what, tens of thousands of people greeting him with a big speech he's delivered in Germany.

Peter, Nate Cohn made a point this morning that there's one parallel here that the U.S. should consider with the Brexit vote and with the rise of Donald Trump. The well-educated, he said, the more elitist population, if you will, have a tendency to discount the will of the people. Do you agree with that assessment?

BEINART: Yes. I think there's something to that and I think there's been a certain kind of disbelief. You saw that disbelief in the United States about the polls showing that Trump was doing really well. We saw some of that in the UK, too. People believed that even though the polls showed that it was very close, that somehow at the end of the day people would never actually pull the trigger on Brexit.

This is the more fundamental conflict. The idea of democracy, which is that the people rule, is not always -- there's a tension between the idea that the people make decisions between democracy and the idea that we have certain rights, that the people are not supposed to be -- able to override. So a majority of Americans might want to ban Muslims from coming into the country. That's their democratic right but we're all supposed to have certain freedoms in the United States that the people can't overrule.

And this very fundamental tension between democracy on the one hand and liberty on the other is part of what you're seeing playing out.

BLITZER: Gloria, what do you think?

BORGER: Yes -- no, you know, I totally agree. I mean, I think you make a -- you know, you make a very good point. I mean, there is this tension. We saw it in our election. We were wrong, if you call us part of the elites. We didn't -- we didn't predict the rise of Donald Trump. I think now, however, in our own framework here, we're in a different context.

[17:45:02] We've moved out of the primaries. We're moving to a general election. So there are not only the base Republican voters but you have the persuadables and the independent voters and so you are bringing in a new segment of the electorate which will be taking a harder look. Some of them will be elite and some of them aren't.

BLITZER: Did the polls get it wrong this time in Britain? PRESTON: You know, I don't know.

BORGER: Not really.

PRESTON: I mean, look, I think it was going to be a close vote no matter what. In fact, when I watching the returns last night I thought that Brexit --

BORGER: It was close.

PRESTON: Was going to do away, that they were going to stay and not leave. But if you look at where the vote came in the UK, it was very much like what you see in the U.S. it was --

(CROSSTALK)

PRESTON: It wasn't the urban centers, right?

BORGER: Right.

PRESTON: It was --

BORGER: Rustbelt.

PRESTON: It was the rustbelt, right, of what we say middle America. So listen, now the UK has got to deal with what they've dealt themselves and perhaps it works well for them. Perhaps it doesn't. But the question is, does the domino effect roll into us?

BLITZER: All right. We know that Trump supporters think this bodes well for Donald Trump heading towards November.

BORGER: Right. And it might.

BLITZER: But we shall see.

PRESTON: Right.

BLITZER: All right. Guys, stand by. Coming up, dangerous new threats from Kim Jong-un. Why is the volatile North Korea dictator boasting the new found ability to kill, and I'm quoting him now, "American bastards."

Plus, historic flooding has killed at least 20 people in West Virginia. We're going to bring you details on the unfolding disaster.

(COMMERCIAL BREAK)

[17:50:52] BLITZER: New tonight, Kim Jong-un is basking in the success of a recent North Korean missile launch and he's boasting as his regime's new found capabilities give him the chance to directly strike Americans.

Brian Todd has been working this developing story for us. Brian, what are you learning? BRIAN TODD, CNN CORRESPONDENT: Learning tonight, Wolf, that Kim Jong-

un has a new swagger after testing his intermediate range missiles this week. He is taunting Americans saying he can strike them at any time. U.S. officials watching Kim's regime very closely to see how far he'll go to provoke.

UNIDENTIFIED FEMALE (Through Translator): Kim Jong-un said we now have the clear capacity to directly and realistically attack American bastards who continue to attempt to invade the Pacific.

TODD: Kim just tested two medium range ballistic missiles, one failed, but weapons monitors call the other a partial success because the missile flew 250 miles and even briefly entered space.

(On camera): Saying that he can realistically attack Americans, and not just the U.S. in general, that's a new level of threatening language from Kim. Right?

UNIDENTIFIED MALE: Yes, the potential for provocation and provocative language is enhanced by Kim by the fact that now he has the technology that goes to match the language.

TODD (voice-over): When Kim perfects the so-called Musudan missiles he just tested, experts say he'll be able to strike the Aleutian Islands in Alaska or U.S. military units on Guam. A U.S. intelligence official tells CNN tonight Kim's aggressive language, his celebration of this missile launch underscores his regime's aspiration to be recognized as a nuclear power. Analysts say Kim also wants to fend off the threat he perceives from his principal enemies who've just wrapped up a massive military exercise on his doorstep.

UNIDENTIFIED MALE: He wants to deter America from even threatening to intervene. He wants to deter South Korea at the same time obviously. And to do that he wants to be able to say I can attack American bases, kill Americans in their beds.

TODD: Kim is also believed to be toughening up against the U.S. possibly to extort concessions, an attempt to get sanctions loosened. Although he solidified his hold on power, analysts say if his economy gets squeezed too tightly, he won't be able to buy off North Korea's elites and he could be threatened from within. But would this bold impetuous leader really provoke the Americans by striking them with a missile?

UNIDENTIFIED MALE: Any real provocation where he fires one missile off with a real warhead that does damage, he'll be decimated. Pyongyang will become essentially a bowl of glass and I think he knows that.

(END VIDEOTAPE) TODD: Still, there are tens of thousands of Americans in Kim's line of fire. More than 28,000 American troops are deployed in South Korea. Analysts worry tonight that if Kim tries to provoke South Korea with artillery fire, maybe a commando raid, that a mishap, a miscalculation from Kim's forces could harm those Americans and we could be in for a dangerous escalation -- Wolf.

BLITZER: Brian, you've also, I'm told, picked up some new information tonight about some of Kim's longer range missiles. How close are they to being operational?

TODD: That's right, Wolf. The weapons monitoring group 38 North says even though those intermediate range Musudans didn't perform all that well in this week's tests, the North Koreans are improving the engines for those rockets. Their propulsion systems. 38 North says that given their progress North Korea's KNO8 missiles, these models here, which could hit America's West Coast and its KN14 missiles which could hit Chicago could be operational within maybe five to seven years.

BLITZER: Those missiles potentially could have nuclear warheads, too, right?

TODD: That's right, Wolf. They are perfecting the technology to miniaturize warheads, put them on these missiles and then, you know, basically all bets are off as far as the threat he can pose. He is even developing a longer range missile that could hit America's East Coast. They have not tested the re-entry for those missiles yet. But again with each of these failed missile tests, they're getting better at the technology and they're accelerating their program.

BLITZER: Very worrisome development. All right, Brian, thank you.

Coming up, global markets meltdown as investors absorb the shock of the United Kingdom's stunning splitting with the European Union.

[17:55:02] How will the turmoil affect the American economy?

Plus we'll bring you new details we're getting of historic flooding in West Virginia right now which has killed at least 20 people.

(COMMERCIAL BREAK)

BLITZER: Happening now. Breaking news, continental uncoupling. The British prime minister is calling it quits as shockwaves spread around the world. Now that voters in the United Kingdom has demanded a divorce from the European Union. We're covering all the consequences of this truly historic and surprising vote.

U.S. stocks plummet. Massive new losses at the closing bell. Global markets are reeling from the seismic shift in Europe.